You are here: Home » Markets » News
Business Standard

EPFO may provide 8.6% interest rate for 2012-13

To benefit about 5 crore subscribers

Press Trust of India  |  New Dellhi 

Faced with criticism for slashing interest rate on deposits by 1.25% for 2011-12, the retirement fund body EPFO may raise it to 8.6% for this fiscal to benefit about 5 crore subscribers.

Last month, the Employees' Provident Fund Organisation (EPFO) had brought down the rate of interest to 8.25% for 2011-12 from 9.5% provided in 2010-11, evoking sharp criticism within and outside Parliament.

"EPFO is working on income estimates to provide 8.6% rate of return on provident fund deposits during this fiscal," a source privy to the development said.

He further said the EPFO's apex decision making body, Central Board of Trustees (CBT), headed by the Labour Minister could meet next month to take a call on the issue.

The source said EPFO can provide higher returns in the current fiscal as the government has increased interest rate on Special Deposit Scheme (SDS) 1975 to 8.6% from 8% with effect from December 1, 2011.

The EPFO has parked about Rs 55,000 crore in the scheme which was launched by the Central government on July 1, 1975 to provide better returns to non-government provident funds and other such funds.

"EPFO was finding it difficult to maintain rate of return above 8.5% because of low interest rate on investment in SDS. But since that income would go up, it would be easier to provide interest rate over 8.5%," EPFO trustee D L Sachdev told PTI.

He said the other investments made by EPFO are well managed by the fund managers and yield rate of returns which are higher than 8.5%.

During the previous CBT meeting, the unionists had demanded matching EPFO's interest rate with that of Public Provident Fund (PPF). The government has hiked PPF rate to 8.8% from 8.6% last month.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, April 05 2012. 17:30 IST
RECOMMENDED FOR YOU
.